For fiscal year 2018, Wal-Mart Stores, Inc. (WMT) had total revenues of $500.34 billion, net income of

$9.86 billion, total assets of $204.52 billion, and total shareholders' equity of $77.87 billion.

a. Calculate Walmart's ROE directly, and using the DuPont Identity.

b. Comparing with the data for Costco

For fiscal year 2018, Costco Wholesale Corporation (COST) had a net profit margin of 2.08%, asset turnover of 3.55, and a book equity multiplier of 3.37. Costco's ROE (DuPont) is 24.88%. Use the DuPont Identity to understand the difference between the two firms' ROEs.

a. The ROE calculated directly is

enter your response here ___________

%. (Round to two decimal places.)

The ROE calculated using the Dupont Identity is

enter your response here _____________

%. (Round to two decimal places.)

b. Wal-Mart has a inferior profit margin, a

lower

higher

asset turnover and a

lower

higher

equity multiplier. Wal-Mart has a

smaller

larger

ROE that is driven by it's asset turnover and leverage.